A Competition Bureau (CB) report shows the grocery business in Canada is dominated by a few prominent players who have the power to set high prices. .The CB report recommends the government intervene to support new entrants who can offer more competitive prices and increase consumer choice in the grocery market..“Canada’s grocery industry is concentrated. It can be difficult for small and medium-sized businesses to compete effectively against Canada’s grocery giants,” said the CB report..“It is also challenging for new businesses to enter the industry successfully.”.Published on Tuesday, the watchdog report began last year amid rapidly increasing food costs..The CB invested several months in thoroughly analyzing different parts of Canada's grocery industry..The dominance of the grocery store market in Canada is in the hands of three major domestic companies, Loblaws, Metro, and Sobeys, as well as international players like Walmart and Costco..Loblaws, Metro, and Sobeys had more than $100 billion in sales last year and a profit of $3.6 billion..According to the report, the bureau discovered the industry lacks the level of competition it could have, resulting in consumers bearing higher costs..“Canada needs solutions to help bring grocery prices in check,” said the CB..“More competition is a key part of the answer.”.The CB suggested four policies to promote competition in the grocery sector..First, the government aims to establish a Grocery Innovation Strategy to support the development of online-only grocery businesses..Second, policies will be implemented by all levels of government to encourage the entry of new independent and international players into the Canadian grocery market..“Independents play an important role in communities across Canada, but without government support, we should not expect them to significantly expand in the near future,” said the CB report..Third, legislation will be introduced to enforce harmonized unit pricing requirements, simplifying the process for consumers to compare prices and find the best deals..Fourth, property controls that limit how competing grocers can use real estate will be restricted, removing barriers for new stores to open and operate..“Change will take time. These solutions will not bring Canadians' grocery bills down immediately. But by acting now, governments at all levels can take steps toward creating a more competitive grocery industry in Canada,” said the CB..“Despite these challenges, we are of the view that attracting new grocers to the Canadian market is one of the key levers governments have to help bring about lower prices and greater choices for Canadians.”.Last week, the Bank of Canada released the Markups and Inflation During the COVID-19 Pandemic report, which found that grocery stores were not "profiteering.".READ MORE No ‘greed-flation,’ fed gov’t finds no 'profiteering' despite high inflation
